By Philip Thornton and Charles Arthur

It is a story of empire-building, intrigue, espionage,
double-dealing and arm-twisting that Rudyard Kipling
would have been proud to write. Kipling popularised the phrase "The Great Game" to
describe the secret battle to dominate central Asia
fought between the British Empire, Russia and France. But even he would have blanched at plans by the United
States - with the help of the oil giant BP and British
taxpayers - to establish a hegemony across an area
stretching from the Russian borders to the
Mediterranean Sea.

Inevitably, the need for oil is at the heart of the
story. Two former Soviet states, Azerbaijan and
Kazakhstan, between them have oil reserves three times
the size of America's. The "game" is to find the
safest way to get that black gold into the petrol
tanks of American cars. The US has been pushing for a new pipeline since Bill
Clinton was in office. At first, companies were
reluctant, but the rising price of oil, allied to
threats in the Persian Gulf and the likelihood of huge
reserves of oil and gas worth as much as $4 trillion
under the Caspian, has made them increasingly bullish.
The US Environment Department estimates that by 2010,
the Caspian region could produce 3.7 million barrels
per day. This could fill a large hole in world
supplies as world oil demand is expected to grow from
76 million a day, in 2000, to 118.9 million by 2020. By this time, the Middle Eastern members of OPEC would
be looking to supply half of that need. The geopolictical stakes are high - the pipeline would
be able to pump as much as 4.2 million barrels per
year, easing the US's reliance on the unstable Gulf
states for oil.

The answer is the world's longest export pipeline, a
1,090-mile, 42-inch wide pipe snaking its way within a
500-metre corridor from the Caspian Sea port of Baku,
in Azerbaijan, to Ceyhan, in Turkey, via some of the
world's most unstable and conflict-ridden nations. The project will cost up to $4 billion (Â£2.4bn) and is
being built by a consortium of 11 companies led by BP.
Almost three quarters of the funding will come in the
form of bank loans including some $600 million of
taxpayers' money.

The consortium has asked the World Bank and the
European Bank for Reconstruction and Development for
$300 million each in loans. In addition it has asked
government agencies, including Britain's Export Credit
Guarantee Department (ECGD), to underwrite the risk of
the project being sabotaged by civil war or terrorism. On Thursday, the project receives its first public
test when the International Finance Corporation, an
arm of the World Bank, meets to approve its loan. The decision will be taken on a vote of its 173
country members, although two of the most influential
are the US, with almost a quarter of the votes, and
the UK, which has 5 per cent of the voting power.

Opponents say if the pipeline is built it will wreak
environmental, social and economic havoc along its
length. The Baku Ceyhan Campaign (BCC), which includes Friends
of the Earth and the Kurdish Human Rights Project,
last week lobbied Hilary Benn, the international
development secretary, to vote against it at the IFC. It handed over a 220-page dossier earlier this month
claiming the pipeline would break public lending
guidelines on 173 counts. The Department for International Development
steadfastly refused to comment until after the vote,
but the opponents are more than happy to fill the
vacuum. They say the environmental threat is two-fold - what
happens if the pipeline goes wrong and the destruction
it would wreak even if it goes right. They warn the risk of a serious tanker spillage - on
the scale of the Exxon Valdez that polluted miles of
coastline when 258,000 tonnes of oil leaked - would be
multiplied once the oil starts to flow. In addition, they say that Turkey lies in an
earthquake zone with 17 major shocks in the last 80
years. Since the Baku line will be in place for some
40 years, it says there is a high chance of a major
earthquake during its operation.

Environmental groups say that the pipeline poses
multiple threats. The potential for havoc begins at
the Caspian Sea where the sturgeon fish, whose eggs
provide caviar - are already under threat. The Caspian
is one of the most polluted bodies of water in the
world, and the World Bank estimates that each year a
million cubic metres of untreated industrial
wastewater is dumped in the sea. Much of this is from
oil production, the critics say, and increased
production would make it worse at a time when sturgeon
numbers are reckoned to be collapsing due to pollution
and overfishing. "The proposed route crosses more than 20 major rivers
and several seismic areas. In Azerbaijan, it traverses
a desert area that will require at least 10 years for
complete habitat recovery," said Carol Welch of
Friends of the Earth US. "In Georgia, the project will clear areas in two dense
primary forests, crosses the buffer zone of a
protected natural park, and could badly affect several
rare and endangered species." In Turkey there were more than over 500 endemic plant
species within the corridor, while a third of the
country's globally-threatened vertebrates are to be
found within 250 meters of the corridor. The route crosses two sites protected under national
legislation, including a wildlife protection area for
the Caucasian grouse, a threatened species. There are
two critically endangered plant species and 15 bird
species with nesting pairs numbering 500 or less are
within the corridor.

But objectors say the impact goes even wider. They
claim legal agreements make BP the effective governing
power over the corridor, over-riding all
environmental, social, human rights or other laws for
the next 40 years. Amnesty International, which is urging the Government
to reject the request for export guarantees, accuses
the consortium of concluding an unprecedented
agreement with the Turkish government which, it
claims, will strip local people and workers of their
civil rights. BCC says that Turkey has handed so much power to the
consortium that it in breach of treaties it signed
with Brussels ahead of its accession to the European
Union.

The EBRD is due to make its decision at a meeting on
11 November while Britain's Export Credit Guarantee
Department may not make a recommendation on the
request for an undisclosed amount of cover to
ministers until next year. A spokeswoman for the ECGD said: "Cover would only be
given if the ECGD were satisfied the relevant
environmental, social and human rights impacts had
been properly addressed, and the financial and project
risks were acceptable."

However, critics say the pipeline will destroy the
livelihoods of farmers and fishermen along the route
and fuel ethnic tensions. Since the 11 September 2001 terrorist attacks, the US
has enthusiastically started building military bases
across a region that was off limits during the Cold
War, offering financial aid to country governments in
exchange for permission. The pipeline will be guarded either by the US Army or
by local forces that are dependent on US support.
Inevitably, opposition groups to the current
governments are labelled terrorists by the Americans.

In his authoritative book, The New Great Game,
journalist Lutz Kleveman says: "The US-led Afghan
campaign has fundamentally altered the geostrategic
power equations in central Asia, which has become the
new focus of American foreign power." The role of the World Bank and the EBRD is to provide
the imprimatur of public approval for the project. This is politically significant to some of the
smaller, state-owned oil companies in the nine-member
consortium in the project, including SOCAR, the
Azerbaijani state oil company, which owns 25 per cent
of the shares. Although the financial authorities will decide whether
public money goes into the project, BP has warned that
it is "commercially robust" and that it will press
ahead anyway.

BP mounted a stout defence of its project and of the
consultation it has carried out. Toby Odone, its Baku
spokesman, said the consortium had carried out
extensive consultation in all three countries
involved. "We feel we have done plenty in preparation
and have done environmental and social assessments for
two years," he said He said the project, which began building in May and
is now 40 per cent complete, would go ahead even if
the IFC turned it down and other members of the
consortium pulled out. "We would have to find another approach that worked,
but we feel confident and comfortable that the funding
will come through," he said. BP has a 30 per cent stake so failure would jeopardise
some $1 billion of revenue. But is more important
significant in terms of finding oil supplies outside
the Gulf. It recently signed a $4 billion deal with TNK, the
Russian oil giant, but the arrest on Sunday of Mikhail
Khodorkovsky, the head of rival oil gain YUKOS,
highlights the risk involved. Protesters have also delighted in contrasting the Baku
proposals with BP's attempt in 2001 to re-brand itself
as "beyond petroleum" with more focus on hydrogen and
renewable energy.

Scheduled to begin working in 2005, the pipeline is
expected to bring in more than Â£65m annually to the
regions through which it passes. But there are doubts about whether the money generated
will benefit people and the environment in the area -
or simply corrupt officials among the "corridor"
governments. Of course there are alternative routes for a pipeline
from the Caspian Sea. The problem, however, is not
environmental but geopolictical. Iran has suggested a
route along the eastern shore of the Caspian to
Turkmenistan and through Iran to the Persian Gulf. It
has offered $1.6 billion towards the cost, but this is
unlikely to be accepted. Another possibility would be
a south-eastern route to post-Taliban Afghanistan.
Lastly Russia is lobbying for the oil to be pumped
through its network to the Black Sea port of
Novorossiisk, but that would put US oil supplies at
risk.

Mr Kleveman warns that imperial ambitions in the
region will end in the same way they did for the
British and the Russians: "The actors may have changed
since Kipling's time but its culmination in war and
death remains the same and the victims are nearly
always innocent civilians," he writes. "They know why
oil is called the Devil's tears."

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